The Facts About Women's Wages

One of the most enduring myths in American public policy is the belief that women face widespread wage discrimination. Proponents of "pay equity" insist that women earn about 75 cents for every dollar earned by men—and that most (or even all) of this "wage gap" is due to employers’ anti-female bias. Armed with this statistic, radical feminists in Nevada and throughout the nation lobby for greater regulations and government resources to mandate that the sexes receive equal pay for comparable work. But careful analysis shows that the wage gap is just another tool for those who wish to micromanage America’s workplaces. Women are not victims of sexist bosses—the difference between men’s and women’s average pay can easily be explained by the choices workers make. Furthermore, the economic status of women has never been better.

The Wages of Dishonesty

The equal-pay movement is founded on the specious assumption that discrimination against female workers can be proved by comparing the compensation of all male workers to the compensation of all female workers. But this broad view ignores the consequences of the decisions men and women make over the course of their professional lives. "As any economist knows, much of the wage gap is explained in differences in education, occupation and experience," writes Cathy Young of the Women’s Freedom Network. Many women, for example, leave the workforce to have and raise children. Women tend to be less willing to commute long distances. For the most part, women are less willing than men to enter high-risk, high-reward positions—preferring jobs which offer security and allow for flexible schedules, but do not pay as much. Women generally work about eight hours a week less than men. These are just some of the factors which can lead employers to pay men higher wages than women. The different preferences and habits of men and women explain the variance in the sexes’ pay. As the American Enterprise Institute’s Diana Furchtgott-Roth puts it, "Measuring so-called discrimination by comparing women’s wages to the median wage is like saying there’s something wrong with oranges because they are smaller than grapefruits."

Digging Deeper

So it’s little wonder that when the pay of workers with the same age, education and experience is examined, no wage gap appears. "When earnings comparisons are restricted to men and women more similar in their experience and life situations, the measured earnings differentials are typically quite small," writes economist June O’Neil. The National Longitudinal Survey of Youth has shown that for workers aged 27 to 33 who have never had a child, women’s wages are 98 percent of men’s. A 1993 U. S. Census study concluded that never-married women who work full time earn $1,005 for every $1,000 earned by men in similar positions. Among married couples, 22.6 percent of wives now earn more than their husbands. Statistical analysis aside, common sense dictates that wage discrimination by sex is largely a feminist illusion. If it were true, a competitive economy would almost require that firms cut costs by firing their male workers and replacing them with female employees. As Sheldon Richman of the Future of Freedom Foundation asks, "How many employers are willing to forgo profits just to keep women’s pay down?"

Spreading the Myth

Despite the wage gap’s flimsy intellectual underpinnings, it continues to resonate with many Americans—and this has not gone unnoticed by activists and professional politicians. In his State of the Union speech in January, President Clinton called on Congress to appropriate an additional $14 million to help the Equal Employment Opportunity Commission and the Labor Department’s Office of Federal Contract Compliance Programs enforce federal equal pay laws. The AFL-CIO has made pay equity a lobbying priority, and is pushing equal pay legislation in over 20 states this year. Each April, the National Committee on Pay Equity—a coalition of unions, feminist groups, and the religious left—holds "Equal Pay Day" demonstrations on the day they claim women’s wages catch up to the wages earned by men in the previous year. This year, Equal Pay Day officially falls on April 5, but the NCPE has moved the "observed" day to April 8, in order to maximize post-Easter media coverage.

Women Mean Business

It is unfortunate that the proponents of the wage-gap myth choose not to acknowledge the remarkable economic progress women have made in recent years. Women-owned businesses, for example, are flourishing. Several years ago, the National Foundation for Women Business Owners (NFWBO) released a study which concluded that between 1987 and 1996, women-owned businesses grew at a faster rate than the economy itself. Female-run firms increased in each of the nation’s top 50 metropolitan areas. There are more than 8 million women-owned businesses today, and minority women in particular are starting businesses at a rapid rate. In 1996, female entrepreneurs employed 18.5 million people and sold $2.28 trillion worth of goods and services.

Thriving in the Desert

If Las Vegas and Reno had been included in the NFWBO’s study, the cities would have ranked first and third in growth of women-owned businesses—giving Nevada the highest rank among the 50 states. In 1996, women owned 47,000 businesses in the Silver State and employed 130,000 workers. "In what I have seen in the last five years, the good ol’ boy network has been replaced by one of equality in gender and race," Patricia Larson, the co-founder of Port of Subs, told the Reno Gazette-Journal in 1997. In 1998, Cira Drake of Cirani, Inc. told the Las Vegas Business Press: "The climate here is more receptive to women owning businesses than in other parts of the country. … It is easier to get into self employment here because there are so many new opportunities with the city growing so quickly." Such optimism perhaps explains why last year’s Equal Pay Day protest, organized by the Southern Nevada chapter of the National Organization for Women, attracted only a smattering of supporters. The demonstration at the Foley Federal Court Building drew only six picketers—even the Las Vegas Sun characterized it as "a bit of a flop."

Conclusion

"Feminists have invented [Equal Pay Day]," writes the American Enterprise Institute’s Furchtgott-Roth, "just as they have invented the myth of the glass ceiling, in an attempt to give less-qualified women undeserved promotions and raises." Women do not face widespread wage discrimination, and female-owned businesses are booming in Nevada and throughout the nation. When feminists march for equal pay tomorrow, they will be propagating a myth which serves not the interests of female workers, but a shortsighted group of activists and politicians who refuse to face the truth about the economic status of women.

Judy Cresanta is president of Nevada Policy Research Institute. She can be contacted at jc@npri.org.